ACV Auctions(US:ACVA)2022-11-08 16:00Financial Performance - For the three months ended September 30, 2022, 133,165 Marketplace Units were sold, representing a Marketplace GMV of $2.1 billion, a 6% increase from the same period in 2021[101]. - Total revenue for the three months ended September 30, 2022, was $105.4 million, reflecting a 15% increase compared to the same period in 2021[101]. - The company reported a net loss of $23.7 million for the three months ended September 30, 2022, compared to a net loss of $24.8 million for the same period in 2021[101]. - Adjusted EBITDA for the three months ended September 30, 2022, was $(11.8) million, an improvement from $(12.4) million in the same period of 2021[101]. - For the nine months ended September 30, 2022, Marketplace Units sold totaled 421,337, with a Marketplace GMV of $7.2 billion, a 33% increase from the same period in 2021[101]. - Total revenue for the nine months ended September 30, 2022, was $323.6 million, a 25% increase compared to the same period in 2021[101]. - Net loss for the nine months ended September 30, 2022, was $(77,678) million, an increase from $(51,870) million for the same period in 2021[180]. Revenue Breakdown - Marketplace and service revenue reached $90,852 thousand for the three months ended September 30, 2022, compared to $79,306 thousand in the prior year, reflecting an increase of 14%[138]. - Customer assurance revenue increased to $14,567 thousand for the three months ended September 30, 2022, up from $12,492 thousand, marking a growth of 17%[138]. - Marketplace and service revenue increased to $90.9 million for the three months ended September 30, 2022, up 15% from $79.3 million in the same period of 2021[147]. - Customer assurance revenue rose to $14.6 million for the three months ended September 30, 2022, representing a 17% increase from $12.5 million in the prior year[148]. - Marketplace and service revenue was $277.0 million for the nine months ended September 30, 2022, an increase of $55.4 million, or 25%, compared to $221.6 million for the same period in 2021[162]. - Customer assurance revenue increased to $46.6 million for the nine months ended September 30, 2022, up by $10.0 million, or 27%, from $36.6 million in the prior year[163]. Operating Expenses - Total operating expenses for the three months ended September 30, 2022, were $130,509 thousand, an increase of 12% from $116,448 thousand in the same period of 2021[138]. - Operations and technology expenses for the three months ended September 30, 2022, were $34,328 thousand, up from $26,395 thousand, indicating a 30% increase year-over-year[138]. - Selling, general, and administrative expenses for the three months ended September 30, 2022, were $34,701 thousand, slightly higher than $33,787 thousand in the same period of 2021[138]. - Operating expenses for marketplace and service cost of revenue were $143.4 million for the nine months ended September 30, 2022, reflecting a $29.6 million, or 26%, increase from $113.8 million in 2021[164]. - Selling, general, and administrative expenses rose to $106.9 million for the nine months ended September 30, 2022, an increase of $21.6 million, or 25%, compared to $85.3 million in the previous year[168]. - The comprehensive loss for the three months ended September 30, 2022, was $26.5 million, compared to a comprehensive loss of $24.9 million for the same period in 2021[141]. Cash Flow and Financing - Cash and cash equivalents totaled $294.8 million, with marketable securities amounting to $207.6 million as of September 30, 2022[189]. - Net cash used in operating activities for the nine months ended September 30, 2022, was $(75,309) million, compared to $88,417 million for the same period in 2021[200]. - In the nine months ended September 30, 2022, net cash used in investing activities was $264.3 million, mainly for purchases of marketable securities, financing receivables, and capital expenditures[205]. - Net cash provided by financing activities in the nine months ended September 30, 2022, was $68.5 million, primarily from net proceeds from borrowings on the Revolver[207]. - As of September 30, 2022, the company had cash and cash equivalents of $294.8 million, with borrowings from banks amounting to $70.5 million[219]. Strategic Initiatives - The company continues to invest in growth, which may impact short-term profitability but aims to drive long-term revenue opportunities[122]. - The company plans to enhance its data services offerings, including the introduction of new data-powered products to improve customer decision-making[121]. - The company aims to increase its share of wholesale transactions from existing customers and attract new Marketplace Buyers and Sellers to its platform[115]. - The company is focused on expanding its sales and marketing efforts, which are expected to increase operating expenses in the near term[122]. - The company plans to evaluate spending, including capital expenditures and strategic investments, in light of the COVID-19 pandemic[193]. Acquisitions - The acquisition of Monk SAS in Q1 2022 cost approximately $19.1 million, enhancing the company's position in the used vehicle industry[208]. - The acquisition of Max Digital LLC in Q3 2021 was completed for approximately $61.4 million, also enhancing service offerings in the used vehicle industry[209]. Interest and Debt - Interest income for the three months ended September 30, 2022, was $1,936 thousand, significantly up from $29 thousand in the same period of 2021[138]. - Interest income was $2.6 million for the nine months ended September 30, 2022, a significant increase of $2.5 million from $0.1 million in the same period of 2021[172]. - Interest expense on revolving lines of credit was $0.7 million for the nine months ended September 30, 2022, up from $0.6 million in the prior year, reflecting increased borrowings[173]. - A hypothetical 10% change in interest rates would not materially impact the company's consolidated financial statements[219].